Standard Chartered is exposed after share price rally, says UBS

Standard Chartered, Petrofac, Victrex and Trinity Mirror are in the broker spotlight on Thursday.

Standard Chartered logo on regional headquarters building in Hong Kong
UBS downgraded STAN to a 'sell', but Deutsche still says 'hold'.

Standard Chartered (LON:STAN) is exposed, says UBS, because the stock has recovered so well from last year’s lows.

As the banking share has rallied about 40%, UBS now downgrades to ‘sell’.

Analyst John Napier, in a note, said: “the StanChart rally has happened against a ~60% fall in consensus profit forecasts for this year and 30% decline for next.”

He acknowledged that there are great businesses within the group - namely its transaction banking and financial markets units - but said that certain headwinds would combine with low yield curves and elevated loan losses to make life particularly difficult in the near term.

UBS forecasts a loss for Standard Chartered this year.

Deutsche Bank, meanwhile, retains a ‘hold’ rating for Standard Chartered but lifted its price target to 460p from 400p (current price: 554p).

Elsewhere, oil services group Petrofac Ltd (LON:PFC) was downgraded by Jefferies International to ‘hold’ from ‘buy’.

Berenberg cut polymer group Victrex Plc (LON:VCT) to ‘hold’ from ‘buy’ due to what the wealth manager described as a ‘lack of earnings catalysts’ in the consumer electronic sector.

Panmure Gordon kept to a ‘buy’ recommendation for Trinity Mirror Plc (LON:TNI) but trimmed its price target to 185p from 240p.

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